AFX News Limited
Russian billionaire Abramovich buys gold mine in Chukotka
07.13.07, 8:52 AM ET
ANADYR, Russia (Thomson Financial) - Russian billionaire Roman Abramovich's holding company has bought a significant gold mine in the remote northeastern region of Chukhotka where he is the regional governor, his spokesman said today.
Holding company Millhouse has bought the Dvoinoe mine in the north of Chukotka region, where Abramovich became governor in 2000, spokesman John Mann said.
'Obviously Millhouse is interested in being involved in the long-term development of Chukotka's economy,' Mann told an Agence France-Presse reporter located in the regional capital Anadyr.
The mine is an existing site located in the Chaunsky district on Chukotka's north coast.
It has remaining reserves of 2.79 tonnes of gold, Mann said.
A report in the Vedomosti daily estimated the value of the deposit at between 50-70 mln usd.
Sergei Donskoy, a metals analyst at the Troika Dialog investment bank in Moscow, said that while 2.79 tonnes of gold might be worth that much at current prices, Millhouse likely paid under 10 mln usd for the mine.
Chukotka, located some 6,000 kilometres northeast of Moscow, holds at least 10 pct of Russia's total gold reserves, according to the regional authorities.
The Chukotka administration plans to increase gold output from about five tonnes annually at present to between 15 and 20 tonnes by 2010.
Exploitation of Chukotka's gold reserves has lagged behind that in other regions due to extreme Arctic temperatures and the low level of infrastructure needed for gold mining, notably stable electricity supplies and roads.
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